Government pulls up Uber, Ola over 'unfair trade practices'
Cab aggregators, including Ola and Uber, have been warned of strict action unless they improve their systems and redress rising consumer complaints, a senior government official said on Tuesday.
The government held a meeting on Tuesday with the ride-hailing platforms amid a rise in consumer complaints of alleged unfair trade practices by them, including ride cancellation policy, as drivers force customers to cancel trips after accepting bookings, which results in customers paying cancellation penalties.
"We told them about the rising consumer complaints against their platforms. We gave them the statistics also. We have asked them to improve their system and redress the consumer complaints otherwise the competent authority will take strict action," consumer affairs secretary Rohit Kumar Singh said after the meeting.
Hinting at the scale of customer unhappiness against the cab aggregators, he said the complaints on the Jago Grahak Jago helpline are just the tip of the iceberg.
Central Consumer Protection Authority (CCPA) chief commissioner Nidhi Khare said the cab aggregators should immediately come out with solutions.
"The authority is likely to issue an advisory to ensure that unfair trade practices by cab aggregators are not carried on in violation of consumers' rights," she added.
Khare also said the government has communicated that there will be "zero tolerance against such malpractices" by cab aggregators.
The meeting was attended by representatives of Ola, Uber, Meru, Rapido and Jugnu but declined to speak to the media.
In a statement, the Department of Consumer Affairs said online ride-hailing platforms were advised to take the consumers' complaints with utmost priority and take remedial steps to ensure adequate protection of consumer rights.
The department, under the chairmanship of secretary, held a meeting with major online ride-hailing platforms, to discuss major issues which affect consumers in this sector.
During the meeting, Khare highlighted major issues which affect consumers while availing services through these platforms.
Major categories of consumer grievances, as per the National Consumer Helpline (NCH), were highlighted during the meeting.
As per the data received from NCH, deficiency in services accounted for 56 per cent of the overall grievances during the period April 1, 2021 to May 1, 2022.
The major grievances pointed out during the meeting were deficiency in service, inaccessible customer support, unreasonable levy of cancellation charges and fairness of the algorithms that calculate the charges for the user.
"During the interactions, the companies claimed to have a robust mechanism of redressal of consumer grievances," the official statement said.
Cab aggregators, however, assured that concerns raised in the meeting will be duly taken into consideration.
As regards the cancellation charges, the cab aggregators stated that they are levied to compensate the drivers for efforts made towards fulfilling the order.
"All companies were directed to become convergence partner in the National Consumer Helpline, to enable better grievance redressal for consumers and also compliance with Consumer Protection Act, 2019 and E-commerce Rules, 2020," the statement said.
Giving details about the consumers complaints, the Department said it included driver refusing to take payment by online mode; higher amount charged despite going on the same route previously at a lesser charge; and unprofessional driver behaviour
"No customer care number is provided on the platform; No details of grievance officer is mentioned on the platform to which consumers can address their grievance," the statement said.
In case of cancellation charges, the complaints are that the user is not shown the amount of time within which cancelling a ride is permitted.
"Cancellation Charges are variable and inconsistent. Amount of cancellation charge is not displayed prominently on the platform before booking the ride," the statement said.
Drivers not willing to take the ride, force users to cancel the ride, which entails undue cancellation charges to be borne by the consumer, it added.
Regarding algorithm, the complaint is that users are not shown the algorithm or method used by the company to charge different fares for the same route from two individuals.
On Monday, Singh had said the government has sought information from the cab aggregators on how they handled cancellation charges and surge pricing and how they calculated fares.
"We have asked why the charges to go from point A to point B are different for two different people," Singh had said, adding the ministry was also keen to know whether these ride-hailing apps have taken adequate measures to safeguard consumer data on their platforms.
Last week, Khare said the CCPA has received several complaints from consumers regarding the cancellation and pricing policy of cab aggregators.
"The number of complaints is very high and therefore we have called the cab aggregators for an explanation of their policies," she had said.
Citing a few examples, she had said the regulator has received many complaints of alleged unfair trade practices, including cab drivers forcing consumers to cancel a trip and bear a penalty as the drivers do not want to accept the ride for whatever reason.
Khare further said existing consumers are being charged high rates for a ride, while new users are lured with lower charges for the same distance.
"It appears that cab aggregators are using algorithms to lure new customers, putting old customers at a disadvantage. This is an unfair practice," she added.
Against this backdrop, Khare said the regulator would like to understand their algorithms and other policies adopted for operating as cab aggregators in the country.
Nitish Bhushan, Head of Central Operations of Uber India and South Asia, said, "we are engaged with the Department of Consumer Affairs and deeply appreciate the feedback provided by them and will continue to provide our inputs".
"We strive to be the platform of choice for riders and drivers alike and continue to invest in technology and customer support to deliver an excellent experience for them. We are committed to continually raising the bar for ourselves, our industry, and most importantly for the people who use our services," Bhushan added.